Comments on: NAEA mistake: It’s Estate Agents over valuing property

By: Natalie

Natalie — Mon, 21 Mar 2011 17:48:59 +0000

The only reason our house sale may be about to fall through is because of an undervaluation by the surveyor. We have had plenty of interest and have a buyer who is more than happy with the sale agreed price – how is this the estate agent or seller overvaluing – the market value is what people are willing to pay in the current climate. The surveyor has valued a 3 bed semi freehold the same as a 2 bed terrace which sold 6 weeks ago less than 1/4 km away. Another comparable is a 3 bed end of terrace, no garden, leashold – how can they value these 2 properites the same. If these kinds of valuations continue, so that house sales fall through, then of course it will stiffle the market recovery.

By: Peter

Peter — Wed, 02 Jun 2010 18:32:56 +0000

Mark,
Sorry I did not get to answer sooner, just read yours.
The thing is, the whole way estate agents appraise property needs to change, to get the market turning over houses faster. But instead, if every seller, as well as the agents and the Government all want to stoke up house prices, inflation will be the end result and this will largely defeat the object of doing that anyway.

I think there’s a strategy between Government and estate agents where the government does not discourage agents (of vendors) from stoking up house prices because they want growth in the economy (at least on paper).
Its high time a different approach was taken because this is damaging the economy and has been for years.

If the housing sector is to become an integral part of the mainline UK economy, there now have to be root and branch changes in the way house valuations are initially carried out, and the means by which sales transactions are then achieved. Efficiency and transparency need to be brought in.

If these changes are not made, the status quo will simply continue, i.e. booms followed by slumps in house prices on a cyclical basis; running out of sync with the main economy and causing incalculable damage to it.

With the new Con-Lib coalition we have, probably for the first time ever, a clear choice whether to embrace change for the better in the way houses are marketed; or not.
In my view, it is time we embraced change.

By: Mark

Mark — Wed, 28 Apr 2010 18:25:42 +0000

Estate Agents of course advise vendors on potential value and asking price, but it’s often the vendor themselves who wants to “test the market” with a higher asking price. The asking price is not a formal valuation, it is an invitation to offer. The market then finds it’s own level in terms of the amount interested parties are willing to pay.

Also, it’s actually not necessarily in Estate Agent’s interests for property prices to increase. When prices rise, estate agents % commission usually drops because properties are easier to sell and there is more competition between agents to get new instructions. It is a higher volume of sales that would make Estate Agents more money, not higher property prices in the short-medium term.

I believe the NAEA comments are correct. Many surveyors are overly-cautious in a depressed market, possibly because they are instructed to be so by mortgage lenders (who themselves are/were terrified about their OWN financial situation), or because they are scared something will come back on them later – it’s much safer for them to downvalue and not put their neck on the line – so yes, surveyors have a vested interest in down-valuing in some cases.

I bet the contributor and commentators above would think differently if they were selling their own homes. You cannot have estate agents valuing property like surveyors otherwise the market would never move on! Estate Agents are employed to get the best possible price for their client – the seller. They are not working to get a cheap price for the buyer! the combination of Estate Agents and Surveyors is the necessary system to represent both sides of a transaction in a free market.

By: garry fields

garry fields — Sun, 16 Aug 2009 20:40:11 +0000

Completely agree finding it very difficult at the moment as estate agents on the IOW are putting houses on the market higher than they were at peak price some even 20 to 30% higher??????????????

By: Peter Hendry

Peter Hendry — Mon, 10 Aug 2009 09:08:45 +0000

Its ridiculous for estate agents to suggest that all the mortgage surveyor’s valuations are wrong in a falling market.

The disagreement arises from estate agents having a different market view from surveyors.

Why don’t estate agents learn to value houses like the surveyors which the building societies rely upon? Its not difficult.

If they did that they would give a better service to their clients and help the housing market to function again. They themselves would get more sales that way too.